Statutory Corporations (Liability of Directors) Act 1996 (WA)

Western Australia

Statutory Corporations (Liability of Directors) Act 1996

Western Australia

Statutory Corporations (Liability of Directors) Act 1996 Contents

Western Australia

Statutory Corporations (Liability of Directors) Act 1996

Statutory Corporations (Liability of Directors) Act 1996

An Act to declare the duty that persons who control the affairs of a statutory corporation owe to the corporation, to provide for particular duties in the case of certain statutory corporations and for the recovery of compensation for breaches, to make provision in respect of Ministerial directions, and for connected purposes.

Part 1 – Preliminary1.Short title

This Act may be cited as the Statutory Corporations (Liability of Directors) Act 1996.

2.Commencement

This Act comes into operation on such day as is fixed by proclamation.

[3. Omitted under the Reprints Act 1984 s. 7(4)(e).]

Part 2 – Statutory corporations generallyDivision 1 – Interpretation4.Terms used

In this Part, unless the contrary intention appears — 

corporation means any body corporate established for a public purpose by a written law, but does not include a GTE or a local government;

director means — 

• (a)

  a member of the governing body of a corporation or, if the corporation is governed by one person, that person; or

• (b)

  if the affairs of a corporation are managed by its members, a member of the corporation; or

• (c)

  where a corporation consists of one person, that person;

GTE has the meaning given in the Government Trading Enterprises Act 2023 section 3(1).

[Section 4 amended: No. 8 of 2009 s. 121; No. 13 of 2023 s. 255.]

Division 2 – Duties of directors stated5.Directors’ fiduciary relationship with and duties to corporation

• (1)

  It is declared that a director of a corporation has — 

  • (a)

    the same fiduciary relationship with the corporation; and

  • (b)

    the same duties to the corporation to act with loyalty and in good faith,

as a director of a company incorporated under the Corporations Act 2001 of the Commonwealth has with and to the company.

• (2)

  The duties referred to in subsection (1) are enforceable — 

  • (a)

    by the Minister who is responsible for the administration of the Act under which the director holds or held his or her position; or

  • (b)

    if the Act under which the director held his position has been repealed and replaced by another Act, by the Minister who is responsible for the administration of that other Act; or

  • (c)

    in any case by the Attorney General,

and not otherwise.

• (3)

  Despite this section a written law may relieve a director of liability arising from a breach of the duties referred to in subsection (1).

[Section 5 amended: No. 10 of 2001 s. 220.]

Division 3 – Ministerial directions6.Unlawful directions

It is declared that a Minister cannot give a direction to a corporation under a written law if the direction — 

• (a)

  would require the corporation — 

  • (i)

    to do something that it could not otherwise do; or

  • (ii)

    not to do something that it is obliged to do;

or

• (b)

  is unlawful for some other reason.

Part 3 – Duties of directors of certain corporationsDivision 1 – Interpretation7.Terms used; attempted offences; application of Part

• (1)

  In this Part, unless the contrary intention appears — 

corporation, in relation to a director, means the body specified in the first column in Schedule 1 opposite the reference in the second column that includes that director;

director means a person who holds a position described in the second column of Schedule 1, and includes a person who, under a relevant Act mentioned in that Schedule or another written law, is acting in place of a director, whether the acting is — 

• (a)

  expressed to be temporary; or

• (b)

  as a deputy, an alternate or a representative; or

• (c)

  in any other circumstances.

• (2)

  A person who attempts (within the meaning in section 4 of The Criminal Code) to commit an offence against a provision of this Part is guilty of that offence.

• (3)

  The duties provided for by this Part are in addition to those in section 5.

• (4)

  The provisions of this Part apply to a Board member of the Mid West Development Commission and the South West Development Commission established by the Regional Development Commissions Act 1993 only in respect of the functions of the relevant Commission under Part 5 of that Act.

[Section 7 amended: No. 4 of 2004 s. 58.]

8.Amendment of Sch. 1

The Governor may by regulation amend Schedule 1.

Division 2 – Duties stated9.Duty to act honestly

• (1)

  A director must at all times act honestly in the performance of the functions of his or her office, whether within or outside the State.

• (2)

  A person who contravenes subsection (1) — 

  • (a)

    with intent to deceive or defraud — 

    • (i)

      the corporation; or

    • (ii)

      creditors of the corporation or of any other person;

  or

  • (b)

    for any other fraudulent purpose,

is guilty of a crime and is liable to a fine of $20 000 or imprisonment for 5 years, or both.

Summary conviction penalty: A fine of $12 000 or imprisonment for 3 years, or both.

• (3)

  If subsection (2) does not apply a person who contravenes subsection (1) is liable to a fine of $5 000.

10.Duty to exercise reasonable care and diligence

A director must at all times exercise the degree of care and diligence in the performance of the functions of his or her office, whether within or outside the State, that a reasonable person in that position would reasonably be expected to exercise in the corporation’s circumstances.

Penalty: $5 000.

11.Duty not to make improper use of information

• (1)

  A director or a former director must not, whether within or outside the State, make improper use of information acquired by virtue of his or her position as such to gain, directly or indirectly, an advantage for himself or herself or for any other person or to cause detriment to the corporation.

• (2)

  A person who contravenes subsection (1) is guilty of a crime and is liable to a fine of $20 000 or imprisonment for 5 years, or both.

Summary conviction penalty: A fine of $12 000 or imprisonment for 3 years, or both.

12.Duty not to make improper use of position

• (1)

  A director must not, whether within or outside the State, make improper use of his or her position as such to gain, directly or indirectly, an advantage for himself or herself or for any other person or to cause detriment to the corporation.

• (2)

  A person who contravenes subsection (1) is guilty of a crime and is liable to a fine of $20 000 or imprisonment for 5 years, or both.

Summary conviction penalty: A fine of $12 000 or imprisonment for 3 years, or both.

Division 3 – Compensation13.Compensation may be ordered for breach of s. 9, 10, 11 or 12

• (1)

  Where — 

  • (a)

    a person is convicted of an offence for a contravention of section 9, 10, 11 or 12; and

  • (b)

    the court is satisfied that the corporation has suffered loss or damage as a result of the act or omission that constituted the offence,

the court by which the person is convicted may, in addition to imposing a penalty, order the convicted person to pay compensation to the corporation of such amount as the court specifies.

• (2)

  Any such order may be enforced as if it were a judgment of the court.

14.Civil proceedings for breach of s. 9, 10, 11 or 12

Where a person contravenes section 9, 10, 11 or 12, the corporation may, whether or not the person has been convicted of an offence in respect of that contravention, recover from the person as a debt due to the corporation by action in any court of competent jurisdiction — 

• (a)

  if that person or any other person made a profit as a result of the contravention, an amount equal to that profit; and

• (b)

  if the corporation has suffered loss or damage as a result of the contravention, an amount equal to that loss or damage.

15.Corporation’s power to insure

• (1)

  A corporation may, with the approval of the responsible Minister, pay a premium in respect of a contract insuring a director or a former director against a liability incurred by him or her under section 13 or 14 where the liability arises from conduct involving a breach of section 9 or 10, other than a wilful breach.

• (2)

  In subsection (1) — 

responsible Minister means the Minister responsible for the administration of the Act under which the corporation is established.

Division 4 – Ministerial directions16.Terms used

• (1)

  In this Division, unless the contrary intention appears — 

governing body, in relation to a corporation whose affairs are managed by its members, means the members of the corporation;

responsible Minister, in relation to a direction referred to in section 17, means the Minister by whom the direction is given.

• (2)

  For the purposes of this Division a direction is unlawful if it — 

  • (a)

    would require the corporation — 

    • (i)

      to do something that it could not otherwise do; or

    • (ii)

      not to do something that it is obliged to do;

  or

  • (b)

    is unlawful for some other reason.

  17.Governing body may question direction
• (1)

  Where a direction is given under a written law to a corporation by a Minister and the governing body determines that — 

  • (a)

    it would not be in the interests of the corporation for it to comply with the direction; or

  • (b)

    the direction is unlawful,

the governing body is to notify the responsible Minister in writing within 7 days of receipt of the direction of its determination and the reasons for it.

• (2)

  Where a governing body gives such a notice to the responsible Minister, that Minister is to either — 

  • (a)

    cancel the direction; or

  • (b)

    confirm it and state his or her reasons for doing so.

• (3)

  The confirmation of a direction has no effect if the direction is unlawful.

• (4)

  If the direction is confirmed the corporation is required, subject to subsection (3), to give effect to it.

18.Corporation may challenge direction

A corporation has standing to apply to a court for relief against a direction that the corporation considers to be unlawful.

19.Protection of directors

• (1)

  A director does not contravene section 5, 9 or 10 by doing or omitting to do any thing — 

  • (a)

    if that thing is done or omitted in compliance with a lawful direction given by a Minister in exercise of a power conferred by a written law; and

  • (b)

    where the director was of the opinion that section 17(1)(a) applied to the direction, if he or she made reasonable efforts to cause the governing body to give notice to the Minister under that section.

• (2)

  Subsection (1) does not extend to the manner in which any thing is done or omitted if it is done or omitted in a manner that is contrary to section 9 or 10 and the direction did not require that it be done in that manner.

Part 4 – Relief from liability20.Relief from liability under s. 5, 13 and 14

For the purposes of section 5, 13 or 14, if it appears to the court that a person — 

• (a)

  is, or may be, liable under that section; and

• (b)

  has acted honestly; and

• (c)

  ought fairly to be excused having regard to all the circumstances of the case, including those connected with the person’s appointment,

the court may relieve the person either wholly or partly from liability on such terms as the court thinks fit.

21.Application for relief from liability under s. 5, 13 or 14

• (1)

  Where a person has reason to believe that any claim will or might be made against him or her under section 5, 13 or 14 the person may apply to the Supreme Court for relief.

• (2)

  On an application under subsection (1) the Supreme Court has the same power to relieve the person as it would have had under section 20 if it had been a court exercising jurisdiction under section 5, 13 or 14.

22.Case may be withdrawn from jury

Where a case to which section 20 applies is being tried by a judge with a jury, the judge after hearing the evidence may, if he or she is satisfied that the person ought under that section to be relieved either wholly or partly from liability sought to be enforced against the person — 

• (a)

  withdraw the case in whole or in part from the jury; and

• (b)

  direct judgment to be entered for the person on such terms as to costs or otherwise as the judge thinks proper.

Schedule 1 — Persons who are directors under Part 3

[s. 7(1)]

[Heading amended: No. 19 of 2010 s. 4.]

Corporation	Persons who are directors for the purposes of this Act	Act under which holds position
Chemistry Centre (WA)	a member of the Board	Chemistry Centre (WA) Act 2007
Country Housing Authority	a member of the Authority	Country Housing Act 1998
Forest Products Commission	a commissioner	Forest Products Act 2000
Fremantle Cemetery Board	a member of the Board	Cemeteries Act 1986
Government Employees Superannuation Board	a director	State Superannuation Act 2000
Insurance Commission of Western Australia	a commissioner	Insurance Commission of Western Australia Act 1986
Lotteries Commission	a member of the Commission	Lotteries Commission Act 1990
Metropolitan Cemeteries Board	a member of the Board	Cemeteries Act 1986
Metropolitan Redevelopment Authority	a member of the board of management of the Authority	Metropolitan Redevelopment Authority Act 2011
Mid West Development Commission	a Board member	Regional Development Commissions Act 1993
Racing and Wagering Western Australia	a director of the board	Racing and Wagering Western Australia Act 2003
Rottnest Island Authority	a member of the Authority	Rottnest Island Authority Act 1987
State Government Insurance Corporation 1	a director of the Corporation 1	Insurance Commission of Western Australia Act 1986 2
South West Development Commission	a Board member	Regional Development Commissions Act 1993
Western Australian Coastal Shipping Commission	a Commissioner	Western Australian Coastal Shipping Commission Act 1965
Western Australian Land Information Authority	a member of the Authority’s board of management	Land Information Authority Act 2006
Western Australian Meat Commission	a member of the Commission	Abattoirs Act 1909 3
Western Australian Meat Industry Authority	a member of the Authority	Western Australian Meat Industry Authority Act 1976
Western Australian Treasury Corporation	a director	Western Australian Treasury Corporation Act 1986

[Schedule 1 amended: No. 4 of 1998 s. 48; No. 30 of 1998 s. 8; No. 25 of 1998 s. 27; No. 46 of 1998 s. 12; No. 5 of 1999 s. 21; No. 8 of 1999 s. 19; No. 38 of 1999 s. 76; No. 34 of 2000 s. 72; No. 43 of 2000 s. 65; No. 25 of 2001 s. 69; No. 30 of 2002 s. 47; No. 31 of 2003 s. 208(2); No. 35 of 2003 s. 24(2) and 52; Gazette 26 Nov 2004 p. 5314‑15; No. 20 of 2004 s. 9; No. 28 of 2006 s. 45; No. 60 of 2006 s. 188; No. 10 of 2007 s. 43; No. 28 of 2008 s. 14; No. 45 of 2011 s. 143; No. 25 of 2012 s. 231; No. 9 of 2014 s. 45; Gazette 12 Aug 2014 p. 2891; No. 40 of 2015 s. 56; No. 22 of 2016 s. 16; Gazette 27 Jul 2018 p. 2690; No. 15 of 2021 s. 78(2); No. 13 of 2023 s. 256.]

[Schedule 2 omitted under the Reprints Act 1984 s. 7(4)(e).]

Notes

This is a compilation of the Statutory Corporations (Liability of Directors) Act 1996 and includes amendments made by other written laws 4. For provisions that have come into operation, and for information about any reprints, see the compilation table. For provisions that have not yet come into operation see the uncommenced provisions table.

Compilation table

Short title		Number and year		Assent		Commencement
Statutory Corporations (Liability of Directors) Act 1996		41 of 1996		10 Oct 1996		s. 1 and 2: 10 Oct 1996; Act other than s. 1 and 2: 1 Dec 1996 (see s. 2 and Gazette 12 Nov 1996 p. 6301)
Country Housing Act 1998 s. 48		4 of 1998		14 Apr 1998		1 Jul 1998 (see s. 2 and Gazette 30 Jun 1998 p. 3557)
Western Australian Treasury Corporation Amendment Act 1998 s. 27		25 of 1998		30 Jun 1998		10 Nov 1998 (see s. 2 and Gazette 10 Nov 1998 p. 6149)
WADC and WA Exim Corporation Repeal Act 1998 s. 8		30 of 1998		30 Jun 1998		30 Jun 1998 (see s. 2)
Western Australian Meat Industry Authority Amendment Act 1998 s. 12		46 of 1998		19 Nov 1998		19 Nov 1998 (see s. 2)
Port Authorities (Consequential Provisions) Act 1999 s. 21 (Sch. 1‑8)		5 of 1999		13 Apr 1999		Sch. 1 and 3‑8: 14 Aug 1999 (see s. 2 and Gazette 13 Aug 1999 p. 3823); Sch. 2: 1 Jan 2000 (see s. 2(9) and Gazette 24 Dec 1999 p. 6871)
Marketing of Meat Amendment Act 1999 s. 19		8 of 1999		13 Apr 1999		13 Aug 1999 (see s. 2(2) and Gazette 13 Aug 1999 p. 3823)
Midland Redevelopment Act 1999 s. 76		38 of 1999		11 Nov 1999		1 Jan 2000 (see s. 2 and Gazette 31 Dec 1999 p. 7059)
Reprint of the Statutory Corporations (Liability of Directors) Act 1996 as at 8 Sep 2000(includes amendments listed above)
Forest Products Act 2000 s. 72		34 of 2000		10 Oct 2000		16 Nov 2000 (see s. 2 and Gazette 15 Nov 2000 p. 6275)
State Superannuation (Transitional and Consequential Provisions) Act 2000 s. 65		43 of 2000		2 Nov 2000		17 Feb 2001 (see s. 2(1) and Gazette 16 Feb 2001 p. 903)
Corporations (Consequential Amendments) Act 2001 s. 220		10 of 2001		28 Jun 2001		15 Jul 2001 (see s. 2 and Gazette 29 Jun 2001 p. 3257 and Cwlth Gazette 13 Jul 2001 No. S285)
Reprint of the Statutory Corporations (Liability of Directors) Act 1996 as at 10 Aug 2001(includes amendments listed above)
Armadale Redevelopment Act 2001 s. 69		25 of 2001		26 Nov 2001		23 Mar 2002 (see s. 2 and Gazette 22 Mar 2002 p. 1651)
Grain Marketing Act 2002 s. 47		30 of 2002		25 Oct 2002		31 Oct 2002 (see s. 2 and Gazette 30 Oct 2002 p. 5351)
Public Transport Authority Act 2003 s. 208		31 of 2003		26 May 2003		1 Jul 2003 (see s. 2(1) and Gazette 27 Jun 2003 p. 2384)
Racing and Gambling Legislation Amendment and Repeal Act 2003 s. 24 and 52		35 of 2003		26 Jun 2003		s. 24: 1 Aug 2003 (see s. 2 and Gazette 29 Jul 2003 p. 3259); s. 52: 30 Jan 2004 (see s. 2 and Gazette 30 Jan 2004 p. 397)
Reprint 3: The Statutory Corporations (Liability of Directors) Act 1996 as at 7 Nov 2003 (includes amendments listed above except those in the Racing and Gambling Legislation Amendment and Repeal Act 2003 s. 52)
Criminal Code Amendment Act 2004 s. 58		4 of 2004		23 Apr 2004		21 May 2004 (see s. 2)
Marketing of Eggs Amendment Act 2004 s. 9		20 of 2004		26 Aug 2004		2 Jul 2005 (see s. 2(2) and Gazette 28 Jun 2005 p. 2895)
Statutory Corporations (Liability of Directors) (Act Amendment) Regulations 2004 published in Gazette 26 Nov 2004 p. 5314‑15						1 Dec 2004 (see r. 2 and Gazette 30 Nov 2004 p. 5515)
Machinery of Government (Miscellaneous Amendments) Act 2006 Pt. 3 Div. 6		28 of 2006		26 Jun 2006		1 Jul 2006 (see s. 2 and Gazette 27 Jun 2006 p. 2347)
Land Information Authority Act 2006 s. 188		60 of 2006		16 Nov 2006		1 Jan 2007 (see s. 2(1) and Gazette 8 Dec 2006 p. 5369)
Reprint 4: TheStatutory Corporations (Liability of Directors) Act 1996 as at 9 Feb 2007 (includes amendments listed above)
Chemistry Centre (WA) Act 2007 s. 43		10 of 2007		29 Jun 2007		1 Aug 2007 (see s. 2 and Gazette 27 Jul 2007 p. 3735)
Eastern Goldfields Transport Board Repeal Act 2008 s. 14		28 of 2008		1 Jul 2008		29 Jul 2008
Statutes (Repeals and Miscellaneous Amendments) Act 2009 s. 121		8 of 2009		21 May 2009		22 May 2009 (see s. 2(b))
Standardisation of Formatting Act 2010 s. 4		19 of 2010		28 Jun 2010		11 Sep 2010 (see s. 2(b) and Gazette 10 Sep 2010 p. 4341)
Reprint 5: TheStatutory Corporations (Liability of Directors) Act 1996 as at 4 Nov 2011 (includes amendments listed above)
Metropolitan Redevelopment Authority Act 2011 s. 143		45 of 2011		12 Oct 2011		31 Dec 2011 (see s. 2(b) and Gazette 30 Dec 2011 p. 5573)
Water Services Legislation Amendment and Repeal Act 2012 s. 231		25 of 2012		3 Sep 2012		18 Nov 2013 (see s. 2(b) and Gazette 14 Nov 2013 p. 5028)
Ports Legislation Amendment Act 2014 s. 45 5		9 of 2014		20 May 2014		s. 45(1) and (3)‑(5): 1 Jul 2014 (see s. 2(1)(c) and Gazette 20 Jun 2014 p. 2023); s. 45(2): 1 Oct 2014 (see s. 2(1)(c) and Gazette 19 Sep 2014 p. 3329)
Statutory Corporations (Liability of Directors) (Act Amendment) Regulations 2014 published in Gazette 12 Aug 2014 p. 2891						r. 1 and 2: 12 Aug 2014 (see r. 2(a)); Regulations other than r. 1 and 2: 13 Aug 2014 (see r. 2(b))
Perth Market (Disposal) Act 2015 s. 56	40 of 2015		8 Dec 2015		31 Mar 2016 (see s. 2(2) and 42 and Gazette 31 Mar 2016 p. 969)
Marketing of Potatoes Amendment and Repeal Act 2016 s. 16	22 of 2016		12 Sep 2016		22 May 2021 (see s. 2(d) and SL 2021/60 cl. 2)
Reprint 6: The Statutory Corporations (Liability of Directors) Act1996 as at 23 Sep 2016 (includes amendments listed above except those in the Marketing of Potatoes Amendment and Repeal Act 2016 s. 16)
Statutory Corporations (Liability of Directors) (Act Amendment) Regulations 2018 published in Gazette 27 Jul 2018 p. 2690						r. 1 and 2: 27 Jul 2018 (see r. 2(a)); Regulations other than r. 1 and 2: 28 Jul 2018 (see r. 2(b))
Arts and Culture Trust Act 2021 s. 78		15 of 2021		9 Sep 2021		1 Jul 2022 (see s. 2(b) and SL 2022/77 cl. 2)
Government Trading Enterprises Act 2023 Pt. 12 Div. 8		13 of 2023		22 Jun 2023		1 Jul 2023 (see s. 2(b) and SL 2023/89 cl. 2)

Uncommenced provisions table

To view the text of the uncommenced provisions see Acts as passed on the WA Legislation website.

Short title	Number and year	Assent	Commencement
TAB (Disposal) Act 2019 s. 157	21 of 2019	18 Sep 2019	To be proclaimed (see s. 2(1)(b)(xiii))
Keystart Act 2024 Pt. 8 Div. 7	44 of 2024	13 Nov 2024	To be proclaimed (see s. 2(c))

Other notes

1         The State Government Insurance Corporation ceased to exist on 1 July 2012.

2         Formerly referred to the State Government Insurance Commission Act 1986 the short title of which was changed to the Insurance Commission of Western Australia Act 1986 by the Acts Amendment (ICWA) Act 1996 s. 5. The reference was substituted under the Reprints Act 1984 s. 7(3)(gb).

3         Repealed by the Meat Industry Legislation (Amendment and Repeal) Act 1993.

4         The amendment in the State Superannuation Amendment Act 2007 s. 87 is not included because that section was repealed by the State Superannuation Amendment Act 2011 s. 4 before it came into operation.

5         The amendment in the Ports Legislation Amendment Act 2014 s. 45(4)(b) is not included because it is a duplication of the amendment in s. 45(3)(b) of that Act.

Defined terms

[This is a list of terms defined and the provisions where they are defined. The list is not part of the law.]

Defined term Provision(s)

corporation............................................................................................................... 4, 7(1)

director..................................................................................................................... 4, 7(1)

governing body......................................................................................................... 16(1)

GTE.................................................................................................................................... 4

responsible Minister..................................................................................... 15(2), 16(1)

© State of Western Australia 2024 .

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By Authority: GEOFF O. LAWN, Government Printer